| The Franco-German gulf Oct 23rd 2012, 07:30 It was predictable before the French elections that if Hollande was elected on his manifesto there would be trouble between France and Germany. Now it's pretty bad. http://www.spiegel.de/international/...-a-862644.html Quote:
Since the days of former German Chancellor Konrad Adenauer and former French President Charles de Gaulle, Germany and France have generally been run by politicians who placed more value on unity than their differences. The axis between former German Chancellor Helmut Schmidt and former French President Valéry d'Estaing axis proved to be just as resilient as the partnership between their successors, Helmut Kohl and Francois Mitterand.
Under Merkel and Hollande, however, the German-French partnership threatens to deteriorate into nothing but a façade. The two politicians, who hold the fate of the continent in their hands, greet each other politely with kisses on the cheek, and their respective public relations staffs extol their "professional" and "trusting" cooperation.
In truth, however, the relationship began on a cool note and has since slipped below the freezing point. Hollande doesn't want to forgive Merkel for having campaigned for his conservative opponent, former President Nicolas Sarkozy. Now the Chancellery suspects that Hollande is secretly planning a campaign for Merkel's challenger from the center-left Social Democratic Party (SPD), former Finance Minister Peer Steinbrück.
Mistrust shapes the relationship between Paris and Berlin, on issues ranging from future European bank regulation to the joint aerospace and defense group EADS and the future architecture of Europe. Hollande suspects that Berlin is using budget consolidation as an excuse to gain European dominance. Merkel notes with unease that Hollande is joining forces with Rome and Madrid to form a joint axis against Germany...
...In recent months, impatience with Germany has grown to open displeasure at the Elysée Palace. Hollande believes that the crisis can only be solved if Europe introduces shared liability for debts. His staff is constantly introducing new proposals that tend to differ in name only: euro bonds, euro bills, a debt repayment fund.
The French are also annoyed that Berlin is incessantly calling for strict budget controls while the continent slips into recession. Paris is critical of what it calls Germany's obsession with austerity, and it believes that cutting spending in a sagging economy is the wrong approach. "A fundamental discussion of this austerity policy is in the air throughout Europe," say officials at the Elysée.
Hollande accuses the Germans of having double standards. He argues that they are demanding a lot of other Europeans while unilaterally pursuing national interests, as was the case with aircraft maker EADS. The German-French group wanted to merge with the British defense contractor BAE, which would have created the world's largest aerospace company, but it would also have jeopardized jobs in Bavaria...
...The journalistic broadside that Hollande fired at the Germans before the EU summit was a "remarkable move," sources within Merkel's administration say diplomatically. Translation: It was "incredibly impudent."
Merkel apparently sees the interview as evidence of the Frenchman's political inexperience. Hollande is a novice in the business of governing, Berlin officials say disparagingly. Unlike his predecessor Sarkozy, he had not held any government posts before becoming president. This is why, from Germany's perspective, he is making mistakes that would never have happened to his predecessors, especially in European policy.
The Germans are particularly dismayed over Hollande's attempt to paint himself as the spokesman of the southern EU countries. It upsets them that the Frenchman is reviving old plans for a Mediterranean union on Europe's southern edge...
... The two sides have accused each other of playing with marked cards ever since the unsuccessful June summit in Brussels.
At the time, the Germans and the French had agreed to develop a joint European financial regulatory agency, which was to bail out ailing banks if necessary. The French interpreted the agreement to mean that the so-called banking union was to commence on Jan. 1, 2013, but that apparently didn't coincide with the German view. In Berlin, officials fear that if the launch date is too early, Germany will be stuck with large liabilities for struggling Southern European banks.
The disagreement led to an open quarrel. In mid-September, German Finance Minister Wolfgang Schäuble said publicly that the launch date was not to be. His French counterpart, Pierre Moscovici, was furious. "No, I don't agree with Mr. Schäuble," he said after a meeting in Cyprus, noting that there was no reason to delay...
...With the number of German-French conflicts on the rise, the erstwhile engine of European unification has now become a braking factor instead. The entire EU is waiting for Germany and France to finally reach a compromise over the future architecture of the euro, but Berlin's and Paris's ideas on the issue are still far apart.
Chancellor Merkel insists that Brussels should be able to monitor national budgets in the future. "We should give Europe real rights of intervention in national budgets," she said in the Bundestag last week.
Hollande opposes the idea. In addition, a transfer of sovereignty rights would require amending European treaties, which could be discussed at an EU convention, the results of which would have to be approved by the people in France. Hollande, however, fears that the majority of Frenchmen could say "non" to a referendum, as they did in a 2005 referendum on the European constitution. The French president envisions things basically remaining unchanged in Europe, with the heads of state and government continuing to have the last word.
If an amendment to the treaties is to be discussed at all, it will have to include the so-called communitization of debt, says Hollande, in reply to German thoughts on the issue. But this would be "out of the question" as long as "there are individual national budgets," the chancellor said after the summit.
The fronts are hardened, and time is running out. Under the agreement reached by the European leaders, the EU reforms should be approved by December, if possible.
Much is at stake. If the quarreling partners don't find a convincing solution, the euro crisis could intensify even further, with unforeseeable consequences for all of Europe. The fear of a crash is the one sentiment Paris and Berlin still share wholeheartedly, and it's what Europeans are relying on.
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